A new charge for emergency housing is "taking money from the poor" who have nowhere else to go, a charity which works with the homeless says.
The Ministry of Social Development began charging people in motels and other emergency accommodation 25 per cent of their income on Monday.
The policy, which is part of a broader plan to address homelessness, was meant to come into force in March but was delayed because of the Covid-19 pandemic.
Ministry of Social Development acting general manager of housing Ed Ablett-Hampson said the charge would apply to most of the 4100 people currently in motels. There would be a one-week grace period to give them time to look for other housing and support.
"For those who've been living in emergency housing and paying no costs for a while, we understand this will be a big change," Ablett-Hampson said.
The Emergency Housing Contribution was also part of a plan to move people into more secure, permanent housing.
But Mangere East Family Services CEO Peter Sykes said there were simply not enough affordable private rentals, transitional homes or social housing for them to shift into. State and transitional housing was growing but much slower than demand, he said.
Most people in emergency housing were on benefit payments which were already relatively low and those payments would now be cut by 25 per cent.
"It is taking from the poor and giving to the rich," Sykes said, referring to motel owners who had taken advantage of generous government funding for emergency housing.
Ablett-Hampson said that if the new charge caused serious hardship for anyone, MSD encouraged them to discuss it with the ministry to make sure they were getting all the financial support they needed.
The policy change brought emergency housing into line with other state-funded housing like transitional homes and state houses. It was partly designed to rein in the cost of emergency housing, which has exploded to $83 million for the last three months alone - up from $8m per quarter in 2017.
Community Housing Aotearoa CEO Scott Figenshow said his organisation supported a 25 per cent charge for emergency accommodation, but only if that secured the tenant safe, secure, permanent and affordable housing.
Changes to rental laws earlier this year quietly removed tenancy rights for people in emergency accommodation. Before the law change, they gained the same rights as tenants if they had been in a motel for three months or more. Now, they could be evicted without notice.
"It's a substandard offering," Figenshow said. "They're not paying in exchange for security and stability. So what are they getting?"
Motels were initially meant to be a stop-gap measure for housing the most vulnerable people for no more than a week. When the Government announced the new charge in February, it said people were staying an average of seven weeks.
Solo mother Angelique Dixon, who has six children, said she had been in a hotel in Hamilton for 10 weeks, with two rooms for her family.
She said Work and Income's support was generous, at around $800 a week, and she would probably be able to afford the 25 per cent charge. Others who were on a lower benefit could struggle with it, she said.
Dixon's main problem was that she was struggling to find anywhere else to go. There were 1300 people waiting for social housing in Hamilton, and she found it difficult to find a private rental because of her large family.
Dixon said she had been taken to the Tenancy Tribunal by her last landlord after getting behind on her rent, which meant she was blacklisted by landlords.
"If I was on my own I would live under a bridge if I had to. But children need stability, they can't live like that, they can't live in a hotel or motel - it's not fair on them."
Dixon accepted that hers was an unusual case because of her large family, but said smaller families currently faced the same barriers to get into rental properties.
The emergency housing contribution has been politically divisive. It was initially backed by the Green Party, but the party later reversed its support and said it should be delayed indefinitely.